July 1, 2021 VIA ELECTRONIC MAIL [email protected] Board
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Philip J. Passanante Assistant General Counsel 92DC42 302.429.3105 - Telephone PO Box 6066 302.429.3801 - Facsimile Newark, DE 19714-6066 [email protected] 500 N. Wakefield Drive atlanticcityelectric.com Newark, DE 19702 July 1, 2021 VIA ELECTRONIC MAIL [email protected] board.secretary@bpu. nj.gov Aida Camacho-Welch Secretary of the Board Board of Public Utilities 44 South Clinton Avenue, 9th Floor P.O. Box 350 Trenton, New Jersey 08625-0350 RE: In the Matter of the Provision of Basic Generation Service (“BGS”) for the Period Beginning June 1, 2022 BPU Docket No. ER21030631 Dear Secretary Camacho-Welch: In accordance with the Preliminary 2022 BGS Schedule set forth in the New Jersey Board of Public Utilities’ (the “Board” or “BPU”) April 7, 2021 Decision and Order in the above- referenced matter, enclosed please find Atlantic City Electric Company’s (“ACE”) Company- Specific Addendum proposal for the Energy Year beginning June 1, 2022. Pursuant to the terms of the Preliminary 2022 BGS Schedule referenced above, a generic Proposal for the Basic Generation Service to Be Procured Effective June 1, 2022 (the “BGS Proposal”) has been contemporaneously filed by Public Service Electric and Gas Company on behalf of all New Jersey electric distribution companies (“EDCs”), including ACE. The BGS Proposal describes the BGS auction process, including the pre-qualification of bidders, setting of starting prices, BGS pricing and rate design methodology, and the respective roles of the EDCs and the Board. The BGS Proposal also includes the proposed Supplier Master Agreements. The BGS Proposal and ACE’s Company-Specific Addendum can also be accessed on the BGS Auction website at http://bgs-auction.com/bgs.auction.regproc.asp. Aida Camacho-Welch July 1, 2021 Page 2 Consistent with the Order issued by the Board in connection with In the Matter of the New Jersey Board of Public Utilities’ Response to the COVID-19 Pandemic for a Temporary Waiver of Requirements for Certain Non-Essential Obligations, BPU Docket No. EO20030254, Order dated March 19, 2020, this document is being electronically filed with the Secretary of the Board, the Division of Law, the New Jersey Division of Rate Counsel and the Service List. No paper copies will follow. Thank you for your cooperation and courtesies. Feel free to contact the undersigned with any questions. Respectfully submitted, Philip J. Passanante An Attorney at Law of the State of New Jersey Enclosure cc: Service List IN THE MATTER OF THE STATE OF NEW JERSEY PROVISION OF BASIC BOARD OF PUBLIC UTILITIES GENERATION SERVICE FOR THE PERIOD BEGINNING BPU DOCKET NO. ER21030631 JUNE 1, 2022 ATLANTIC CITY ELECTRIC COMPANY BASIC GENERATION SERVICE COMMENCING JUNE 1, 2022 COMPANY-SPECIFIC ADDENDUM COMPLIANCE FILING July 1 , 2021 ACE Company-Specific Addendum ATLANTIC CITY ELECTRIC COMPANY’S COMPANY-SPECIFIC ADDENDUM The following contains the company-specific material (referred to herein as the “Addendum”) of Atlantic City Electric Company ("ACE" or the “Company”) for the joint compliance filing made with the New Jersey Board of Public Utilities (the “Board” or “BPU”) on this date by the Electric Distribution Companies (the "EDCs") in this docket. Capitalized terms used herein shall have the meanings defined in the joint filing. As described in the generic section of this filing, two (2) different methods will be utilized for the pricing of Basic Generation Service (“BGS”) to customers – residential and small commercial energy pricing and variable hourly energy pricing. The residential and small commercial energy pricing formerly referred to as “Basic Generation Service–Fixed Price” or “BGS-FP”1 now termed “Basic Generation Service–Residential Small Commercial Pricing” or “BGS-RSCP” and the hourly energy pricing service termed “Basic Generation Service – Commercial and Industrial Energy Pricing” or “BGS- CIEP.” BGS-RSCP is to be available to all residential and small commercial customers, specifically those customers taking service on Rate Schedules RS, MGS (Secondary, Secondary Electric Vehicle Charging, and Primary), AGS (Secondary and Primary), DDC, SPL, and CSL. These rate classes comprise the vast majority of ACE’s customers and approximately 87% of the usage on the ACE electric system. As described in detail later in this filing, BGS-RSCP commercial or industrial customers can opt in to BGS- CIEP. 1 In this document, “Basic Generation Service-Fixed Price” or “BGS-FP” has the same meaning as, and is entirely interchangeable with, “Basic Generation Service-Residential Small Commercial Pricing” or “BGS-RSCP.” 1 ACE Company-Specific Addendum BGS-CIEP will continue to be the only default supply option available to customers taking service under ACE's Rate Schedule TGS (Transmission General Service). Pursuant to the Board’s Decision on June 18, 2012, in BPU Docket No. ER12020150, changing the BGS-CIEP required customer capacity peak load share (“PLS”) to 500 kW or greater effective June 1, 2013, will be the only default supply option available to customers on Rate Schedules MGS Secondary, MGS Primary, AGS Secondary or AGS Primary with an annual PLS for generation capacity equal to or greater than 500 kW as of November 1 of the year prior to the BGS auction. There are an estimated 232 eligible CIEP customers representing approximately 13% of the usage on the ACE electric system, whose only default supply option is BGS-CIEP. As described in detail later in this filing, BGS-CIEP will also be available to any commercial or industrial customer on a voluntary basis, regardless of such customer’s regular Rate Schedule. A. COMMITTED SUPPLY “Committed Supply” means power supplies to which ACE has an existing physical or financial entitlement. For ACE, Committed Supply includes its Non-Utility Generation (“NUG”) contracts, including any restructured replacement power contracts, which may extend into or through the BGS bid period. ACE retains the right to negotiate changes in, and operational control over, all of its NUG contracts. As a result of the Board’s December 18, 2002 Order in BPU Docket Nos. EX01110754 and EO02070384, effective August 1, 2003, ACE’s NUG-related Committed Supply (capacity, energy, and ancillaries, if any) is being sold in the wholesale markets. NUG-related capacity, energy, and ancillaries (if any) will continue to be sold in the wholesale markets. These sales shall be considered prudent unless and until the Board determines that a different protocol is appropriate. Just as they are currently, ACE’s actual above-market NUG contract costs will continue to be 2 ACE Company-Specific Addendum charged to the Non-Utility Generation Charge (“NGC”) clause, with full and timely cost recovery assured, and subject to deferral in accordance with ACE's restructuring order. In setting the NGC, the actual NUG contract costs will be offset with revenues received from the sale of NUG power in the wholesale markets. If ACE is required to invoke the Contingency Plan (discussed at length below), Committed Supply may be used to offset requirements associated with the Contingency Plan. Any generation from ACE's Committed Supply that qualifies as a Class I or Class II renewable resource will be used to meet the Renewable Portfolio Standards (“RPS”) requirements, and, since ACE has no BGS supply requirements, it will, to the extent permitted by applicable regulatory and contractual provisions, be credited on a pro-rata basis to winning BGS-RSCP and BGS-CIEP suppliers. This will assure that these environmental benefits are retained by BGS customers in ACE’s service territory. Winning BGS-RSCP and BGS-CIEP suppliers will be responsible for obtaining and providing related verification information to ACE for the minimum Class I and Class II percentages required by the RPS associated with the tranches they serve, net of renewable attributes of the Committed Supply energy proportionately applied and subject to the foregoing limitations to each supplier’s tranches. The ACE NUG-related Committed Supply subject to the foregoing limitations eligible to supply the Class II renewable energy certificate to the BGS suppliers expired on September 5, 2016. B. CONTINGENCY PLANS While not every contingency can be anticipated, ACE can differentiate four (4) areas of concern as follows: a) there are an insufficient number of bids to provide for a fully subscribed Auction Volume either for the BGS-RSCP auction or the BGS-CIEP auction; 3 ACE Company-Specific Addendum b) a default by one of the winning bidders prior to June 2022; c) a default during the June 1, 2022 - May 31, 2023 supply period, under the BGS- CIEP contracts entered into for 12 months; and/or d) a default during the June 1, 2022 - May 31, 2025 supply period, under the BGS-RSCP contracts entered into for 36 months. 1. Insufficient Number of Bids in Auction To ensure that the auction process achieves the best price for customers, the degree of competition in the auction must be sufficient. To ensure a sufficient degree of competition, the volume of BGS-RSCP and BGS-CIEP Load purchased at each auction will be finally decided after the first round of bids are received. Provided that there are sufficient bids at the starting prices, the auctions will be held for 100% of BGS-RSCP and BGS-CIEP Loads. It is possible that the number of initial bids will not result in a competitive auction for 100% of the BGS-RSCP or BGS-CIEP Load. This determination will be made by the Auction Manager in consultation with the EDCs, and the Board Advisor. In the event that the Auction Volume is reduced to less than 100% of BGS-RSCP or BGS-CIEP Load, ACE, at its option, will implement a Contingency Plan for the remaining tranches. Under the Plan, ACE will purchase necessary services (including, but not limited to, network transmission, capacity, energy and ancillary services, and any required RPS Renewable Energy Certificate) for the remaining tranches through PJM-administered markets until May 31, 2023 and may retain Committed Supply to serve these tranches.